We hired a tax attorney because we certainly don't understand the tax codes in foreign countries nor the US rules regarding those living abroad. He lives on the island and is originally from Seattle. He does returns for many of the expats.
The tax attorney gave us an extensive list of all the documents he needed to complete the tax filings for both Bonaire/Holland and the US. Rick and I spent a month gathering all the information required. We submitted everything electronically and hoped for the best.
When our taxes for the US were done, we were surprised by the outcome. Apparently, when you pay taxes in a foreign country, the US refunds/credits you for those taxes. We got a HUGE refund from the US and Colorado.
Dutch taxes are not due until May 15. Once the forms are submitted the Dutch decide if the tax forms are correct and will be accepted. Once accepted, which happens sometime in November, you have two years to pay taxes. Since Rick is still working, the Dutch do tax us but at a minimal amount. It is well worth paying the foreign tax and getting a credit/refund from the US. We do get free health care here so we were happy to pay the tax. There is no tax on food and goods on the island. They do tax gas, utilities and real estate. The Dutch often subsidize gas and utilities during price spikes and pandemics.
The Bonaire government recently put a head tax of $75 for each visitor to the island. They will no longer have a room tax of $5.50 per night for hotels and housing rentals. They also have lifted the tax on rental vehicles which amounts to $4.00 per day savings for renters. The government will realize $6 million from this head tax that every non-resident coming onto the island will have to pay.
WOW I never thought about the taxes you pay to a foreign government when you live there that you can deduct those on your U.S. taxes. We're invested at times so I knew they got deducted. That's awesome you got a HUGE refund!!
ReplyDeleteI never knew Rick is working. What is he doing?
I'd be interested to know how good is the health care you get. I've always heard about long waits in Canada, although Bonaire is quite a bit smaller :-). I'm amazed how long you have to pay back taxes and how long you have to wait to find out about them.
If you ever take time to figure out how much you pay there vs in Colorado let me know. I'm just curious!
Health care in Bonaire has been great so far. No long waits and they take care of everything...no charge. Rick sold his company to his partner and now works part time for the same company. He does environmental due diligence.
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